SunEdison's (SUNE) Cost of Capital on Preferred Offering Could be High Given Conversion Price - RBC

RBC Capital affirms SunEdison (NYSE: SUNE) at Outperform with a price target of $24 (recently lowered from a prior target of $36) following pricing of the company's 650,000 6.75% Series A Perpetual Convertible Preferred Stock, which was $1,000 per share.

Analyst Mahesh Sanganeria commented, We think the offering will allow SunEdison to significantly expand its warehouse facility so that the company can retain more projects in 2016 instead of selling to third parties. We view the offering as an indication of management’s commitment to the YieldCo business model. While the offering will provide enough liquidity, we think the cost of capital can be high given the low conversion price. The offering will create dilution for shareholders.

You May Also Be Interested In

• Goldman Sachs Upgrades Rentokil Initial Plc. (RTO:LN) (RTO) to Buy
• Morgan Stanley Resumes Urban Outfitters, Inc. (URBN) at Overweight
• Best Idea Q3 2026: Ryanair (RYAAY) PT Raised to $79 at Bernstein SocGen